Kicking around Yahoo is easy based on the headlines and fundamentals. But lost in the balance sheet is the general feeling that Yahoo is a rudderless organization with an utter lack of creativity and no real plan to get back on track.

To me, nothing illustrates that tale better than Yahoo’s forays into social media.

Flickr and Facebook Failures

Some might not know it, but Yahoo could have bought Facebook (NASDAQ:FB) for $1 billion if it only pulled the trigger. But even more damning than that bargain price in 2006 was the fact a lack of momentum in earnings was the biggest reason Yahoo pulled the plug on a Facebook buyout.

Thinking quarter-to-quarter while ignoring long-term trends is a fairly common habit on Wall Street … but that’s no excuse for a missed opportunity like that.

However, Yahoo’s social media snafu goes beyond the big player. The troubles also resulted from an inability and downright reluctance to grow Web 2.0 elements and instead cram these sites into the legacy Yahoo business.

Consider that at one time, Flickr was the leading photo-sharing site on the web. Serious artists stored their portfolios there, and crazy parents uploaded hundreds of baby pictures for friends and relatives. This was before Apple (NASDAQ:AAPL) iPhones and Instagram were ubiquitous, too, and Yahoo probably was first in line on the photo-sharing front when it acquired Flickr.

Things went OK at first when Yahoo bought Flickr in 2005. It upped the monthly storage limit for free users and allowed paid accounts to operate without a cap. Why not, after all? Yahoo had the scale and the programmers to take Flickr to the next level.

“Yahoo was a good fit initially,” Flickr co-founder Caterina Fake recently told Gizmodo. “It was a great steward of the brand. It was allowed to flourish. In the subsequent two years after the acquisition, Flickr blossomed.”

Of course, the bloom came off the rose soon. As Gizmodo writer Mat Honan puts it, the company was forced to focus on “integration, not innovation” because it wasn’t as profitable as other legacy Yahoo properties like the mail pages or Yahoo Sports.

Thus Yahoo has failed to keep on top of the social photo scene. Yes, some estimates say Flickr has 50 million “users,” and that’s no mean feat. But Instagram already is near or past that mark despite launching roughly two years ago.